Now that the jobs numbers came in the odds of the fed cutting rates 75 basis points looks to be around 76% according to Fox News. I am currently at a loss of whether or not more fed action is going to make much of a difference or not. Hopefully it will stimulate the purchase market a bit! I don't think it's really saving too many people from foreclosure. I'm a little skeptical of Bernacke's grasp on this situation.
Showing posts with label Ben Bernacke. Show all posts
Showing posts with label Ben Bernacke. Show all posts
Principal Reduction: As a Means of Avoiding Bankruptcy
Proposal:
Fed Chief Ben Bernanke recently told a community bankers group in Orlando that reducing mortage balances, rather than cutting interest rates or extending payments, might be the better approach to helping borrowers.
Concept:
Conceptually, I think it makes sense. Not sure how realistic it will be for lenders? But it could work in some cases.
Concern:
My initial concern is plain & simple - is this option fare to those homeowners who are currently making there payments on-time(regardless of loan type). I am sure that there are homeowners struggling to make ends meet, yet maintaining their mortgage payments. What seems to be the most overlooked aspect of this crisis is personal responsibility of those individuals that took out these mortgages. Not every foreclosure is the result of an unscrupulous mortgage broker or lenient lending standards, for that matter.
Final Thoughts:
Many pieces went into making this mess and it is going to take many pieces to turn it around.
There's just no magic pill for the current ills of the housing market!
Subscribe to:
Posts (Atom)
